International benchmark Brent crude futures for October delivery finished the day up 62 cents at $31.98, pushed higher by a late fund-buying spree. US light crude futures were 55 cents higher at $33.29.

Earlier in the day Saudi Arabia, the world's biggest oil exporter, broke weeks of silence on its oil policy, announcing it would work with others in OPEC for a "suitable rise" in oil output.

The Supreme Petroleum Council for Petroleum and Mineral Affairs, the kingdom's highest authority on energy affairs, instructed Oil Minister Ali al-Naimi after it met "to review the appropriate mechanism that would achieve this stability in coordination with other producing countries".

Prices have refused to leave the $30 danger zone, spreadinganxiety in consuming nations and stepping up pressure on the Organisation of the Petroleum Exporting Countries to boost production at its September 10 ministerial meeting in Vienna.

OPEC has already made two failed attempts to ease soaringprices this year and is expected to turn up the taps by an extra 500,000 barrels per day (bpd) at that conference. But jittery traders worry that will not be enough to meet anexpected jump in heating oil demand this winter.An industry source said after the Saudi announcement thatthe kingdom did not want to be bound by an expected 500,000 bpd OPEC hike when the cartel meets on September 10.But he declined to comment on how much Saudi Arabia thoughtmight be an appropriate additional volume.

US crude stocks up
The resilience of high oil prices was underscored after the market digested the latest data on Tuesday from the American Petroleum Institute, a pivotal weekly US stocks report.

It indicated crude supplies recovered somewhat from recent 24-year lows with a 5.26 million barrel rise after analysts were expecting a 2.3 million barrel increase.

The API report deepened fears over a possible heating oil shortage this winter, as supplies are still almost 30 million barrels below last year's level.

The API said U.S. Distillate stocks, which include heatingoil, climbed only modestly by one million barrels last week.

The US Department of Energy (DOE) reported a less bearish build in US crude stocks than Tuesday's data for the API. The DOE statistical branch, the Energy Information Administration, showed a crude oil build of two million barrels.

OPEC in center stage
The spotlight is now on OPEC as it prepares for its September meeting. Cartel statements this week have not been reassuring to those who want extra barrels in the market soon.

OPEC President Ali Rodriguez of Venezuela blamed high taxation among consumer nations and refinery bottlenecks for soaring prices. He added that OPEC crude supply was adequate and that the cartel could not be held responsible for current oil price movements.

Iran, OPEC's second largest producer, took a similar view, with its OPEC Governor Hossein Kazempour Ardebili speaking of sound market fundamentals.

The latest price rally is becoming increasingly entangled in oil politics in the United States, a huge consumer where high fuel prices are an explosive issue during an election year.

US Energy Secretary Bill Richardson, on a visit to Kazakhstan, reiterated Washington's call on OPEC to unleash extra barrels.

REUTERS